Advisers eye fees bonanza of up to £210m from Cobham

BANKERS, lawyers and other advisers will trouser up to £210m in fees if the £4bn takeover of defence firm Cobham happens.

US private equity company Advent International offered to buy the Dorset-based business for 165p per share last month.

Stock market documents have revealed that the two sides’ advisers will land a payday if they get the deal through.

Cobham, which urged shareholders to accept the offer, expects to spend £29.1m on fees. This includes £24m for financial advisers such as JP Morgan and Bank of America Merrill Lynch.

The firm has also retained star Rothschild banker Ravi Gupta, who worked for vulture firm Melrose on its controversial hostile takeover of engineering stalwart GKN for £8.1bn.

Advent will splash out as much as £189.6m in fees. It will hand up to £135.2m to firms including Blackstone and Goldman Sachs for arranging the finance.

Another £21.8m could go on financial advice, while lawyers could get as much as £7.6m. There is growing opposition to the deal, with interventions from the founding Cobham family and the Liberal Democrats over the buyout due to fears it could lead to cutbacks and put national security at risk.

The firm’s shares rallied more than a third after the takeover was announced and sit just below the bid price at 162.2p.

Cobham is a major Ministry of Defence contractor. It was founded in 1934 by aviation pioneer Sir Alan Cobham, and was the first to produce mid-air refuelling systems. It now makes technology used on Airbus planes and F-35 fighters, and provides training services.

Defence secretary Ben Wallace this week responded to a letter from the Cobham family that called for the Government to intervene in the deal.

The family has argued it is not in the UK’s national interest.

In his response, Wallace has told the family he will look at their concerns and weigh up the impact on the security and skills needed to protect the UK.